Economic Conditions

Sandy Aid Package Passes, But Money Flows Slowly

After months of political maneuvering, Congress has acted on a relief package for the region impacted by Superstorm Sandy. But passing an emergency spending bill and deploying the actual funds are two different processes — and there is no telling when the money authorized by Congress will actually reach the people who need it.

The package includes about $16 billion in community development block grants, money distributed to local governments through the U.S. Department of Housing and Urban Development (HUD). Some of that money will go to other regions affected by other natural disasters. Another $11 billion was allocated to FEMA for disaster relief aid. The Newark Star-Ledger carried this Associated Press report (“U.S. Senate approves $50B Sandy aid package”).

FEMA has already spent more than $3 billion on emergency relief efforts. But the remainder of the new Federal funds could take a long time to get to the affected areas. And Sandy survivors have already been waiting for what seems like a long time, reported the Miami Herald (“3 months after Sandy, victims waiting for relief,” by Meghan Barr and Claudia Torres).

Much of the relief bill’s authorized spending will have to be managed at the state and local level — but also in a way that complies with complex federal government rules. That process will involve delays. How long a delay? Well, people in Sandy’s path should hope that they don’t see the kind of problems that plagued Texas’ response to the 2008 hurricane season, when storms Ike and Dolly hammered the Gulf coast. In 2012, the New York Times reported, much of the HUD funding allocated to Texas remained unspent after four years — while residents intended to receive the help continued to live with damaged housing (“Amid Finger-Pointing, Hurricane Relief Lags,” by Becca Aaronson).

“Nearly four years after Hurricanes Ike and Dolly wreaked havoc on the Texas coast, thousands of Texans are still waiting for housing assistance,” the paper reported. “The long-term disaster recovery effort financed by the federal government has made little headway... According to a state report to the United States Department of Housing and Urban Development at the end of June [2012], none of the 4,100 homes that were expected to be rebuilt or reconstructed with federal money were completed. And by October, the state had spent only 10% of the federal money for long-term recovery.”

Will Sandy rebuilding take as long — or even longer? It’s hard to say. But FEMA manager Michael Byrne, the agency’s top official in the Sandy response, commented: "The infrastructure and the homes that were in place that Sandy took away took a lot longer than 90 days to be built up and put into place. If there's any assurances I can give folks that feel that way, we're not leaving until we get it done."